ABSTRACT
Sir James Steuart’s Inquiry into the Principles of Political Oeconomy (1767; henceforth Principles) was probably the first book in Britain that argued for a theory of public finance on the basis of a consistent system of political economy. Steuart wrote the book in order to suggest useful hints to a statesman, as well as to ‘influence the spirit of those he governs’ (Steuart 1998 [1767], vol. 1: 13). Steuart began to write Book 4, ‘Of Credit and Debts’, and Book 5, ‘Of Taxes, and of The Proper Application of Their Amount’ of the Principles after returning to Britain from exile in 1763, immediately after the Seven Years War.2 In Chapter 12 of Book 5 – the last substantive chapter of the Principles – Steuart demonstrated the following proposal:
Every one who has written concerning taxes has endeavoured to contract [i.e. reduce] the object of them as much as possible: more, I imagine with a view to ease the public than the people. I have followed another course. I have been for multiplying the objects of taxation as much as possible, and for making them more in proportion to expence than to property or income. But that I may conform myself in some measure to the ideas of those who have examined the same subject, I shall propose a tax, which would fill up the place of every other; and could it be levied, would be the best perhaps ever thought of. It is a tax, at so much per cent. upon the sale of every commodity.
